It’s been a rough journey for the cryptocurrency market until 2022. By November the market was down by more than 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash turned things even more dire. So, will the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to more people getting involved in the market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows, more and more people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto, it will lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants start accepting crypto as a means of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long run Being patient and disciplined will be key.